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TMI Blog2023 (2) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 50C/2(14) of the IT Act and CIT(A) is in error to confirm the same. . 2. That the A.O is in error in imposing penalty of Rs. 2,84,382/- is bad in law and CIT(A) is in error to confirm the same. 3. That the assessee has right to add, modify or delete any ground during the appeal proceedings. 2. At the time of hearing, no one attended the proceedings. However, a letter dated 01.02.2023 placed on record wherein Ld. Counsel for the assessee requesting that the written submissions filed by the assessee and the other material may be considered and decide the appeal on the basis of written submissions. Therefore, the appeal is taken up for hearing in the absence of the assessee and being disposed off on the basis of material available on record. 3. Facts giving rise to the present appeal are that assessment u/s 144 r.w.s 148 of the Income Tax Act, 1961 ( the Act ) was completed vide order dated 26.12.2016. Thereby, the Assessing Officer ( AO ) made addition of Rs.24,87,500/- on account of Long Term Capital Gain ( LTCG ). The basis of computing capital gain was that the assessee paid stamp duty on market value of Rs.49,75,000/-. Therefore, the AO made ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 26-12-2016 is wage and routine manner and from the notice, it is not cleared whether the assessee has concealed the particulars of income or furnished inaccurate particulars of income. A.O. Observation : In this regard, Ld. A.O. observed as under: That on going through the relevant documents during the course of assessment proceedings, it is very clear that the assessee had concealed particulars of its income and had rendered itself liable for penalty U/s 271 (1)(c) of the I.T. Act. The concealed income in this case comes to Rs. 15,71,914/- on which tax sought to be evaded works out to Rs. 2,84,382/-. The minimum and maximum penalty leviabe in this case u/s 271(1)(c) of I.T. Act comes to Rs. 8,53,146/- and Rs. 2,84,382/- @ 100% and 300% respectively. However, considering the facts of the case I impose a penalty of Rs. 2,84,382/- u/s 271(1)(c) of I.T. Act after obtaining approval of Addl. Commissioner of Income Tax, Range - 2, Meerut, vide F.No. Addl.CIT-MRT/Range-II/Penalty Approval/2017-18/283 dated 19-12-2017. CIT- Finding: In this case, the A.O. has imposed penalty of Rs. 2,84,382/- since the assessee had, in the opinion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and filed her return of income on 12.09.2009 declaring total income of Rs. 40,27,956/-. The Assessing Officer reopened the assessment u/s 147 on the ground that there was difference of receipts as per Form No.26AS and Income-tax Return. In response to notice u/s 148, the assessee filed the return of income on 15.04.2016. During the course of assessment proceedings, it was submitted that since the assessee could not obtain the copy of bank statement, therefore, the assessee surrendered an amount of Rs.2,47,395/- as income of the assessee on account of undisclosed income. The Assessing Officer accordingly completed the assessment u/s 147/143(3) on a total income of Rs.42,75,350/-. Since the assessee in response to notice u/s 148 filed her return of income declaring the same income which was originally returned and during the course of assessment proceedings had surrendered the income of Rs.2,47,395/-, the Assessing Officer in the penalty order passed u/s 271(1)(c) levied penalty of Rs.84,090/- being 100% of tax sought to be evaded. In appeal, the ld. CIT(A) upheld the action of the Assessing Officer on the ground that voluntary disclosure does not release the assessee from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be levied since it was a bona-fide mistake. It is also the alternate contention of the Id. counsel for the assessee that inappropriate words in the notice has not been struck off and the notice does not specify as to whether the assessee has furnished inaccurate particulars of income or concealed its particulars of income. I find some force in the alternate argument of the Id. counsel for the assessee. A perusal of the notice issued for levied of penalty, a copy of which has been filed during the course of hearing shows that the inappropriate words in the said notice have not been struck off and the notice does not specify as to whether penalty is being levied for concealing the . particulars of income or for furnishing inaccurate particulars of such income. I find the Hon'ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory reported in 359 ITR 656 has held that where the inappropriate words in the notice issued for levy of penalty are not struck off and the notice does not specify as to whether the assessee has concealed its particulars of income or furnished inaccurate particulars of income, penalty u/s 271 (1)(c) is liable to be delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision: In this case the AO has imposed penalty of Rs.2,84,382/- since the assessee had, in the opinion of the AO concealed particulars of income amounting to Rs.15,71,914/-. In appeal the only argument of the ld. AR is that since the capital gain has been calculated on the basis of section 50C which is a legal fiction penalty is not leviable. It is a matter of record that assessment in this case was completed u/s 148/144 which shows that there was no intention on part of the assessee to disclose his capital gain as per the provision of the law. The AR is right in arguing that legal fiction of section 50C cannot be apply to determine concealed particulars of income. The AO is therefore directed to workout the concealed capital gain in accordance with the sale value of the property shown on the Sale Deed and on that basis as well as using the cost of acquisition allowed in appeal. On this actual amount of concealed capital gains the AO is directed to workout the penalty. 9. The above direction of Ld.CIT(A) is clear that penalty cannot be imposed on the basis of legal fiction of section 50C of the Act. He therefore, directed to work out the concealed capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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